Wealth Creation 101: How Your Money Can Work for You (2021)
The year 2020 has been full of ups and downs for investors. The effect of Covid-19 felt like the great depression, and the Dot Com bubble put together. Such an experience should offer you a lifelong lesson on how to prepare yourself for the future.
If 2020 has proved anything, you need to have a financial cushion to shield yourself from the future’s unpredictability.
As the new year approaches, you should get rid of all your bad money habits. Instead, it would help if you focused more on using your money to reach your financial goals. But what should you invest in if you want to secure financial freedom?
Before you can invest, you need to ensure that you can handle the amount of risk associated with the product. Some short-term investments are highly risky but promise high returns. Others run for a long-term carrying low risk and deliver a lower return.
Here is a look at 3 of the best investment avenues that you can use to create wealth and attain your financial goals.
Investing in Direct Equity
Investing in direct equity involves purchasing shares that give you partial ownership of a company. Essentially, you are staking your money on the success of a company. Such an investment is highly rewarding since it guarantees that you will receive a certain percentage of the company’s profits.
However, it also carries a heavy deal of risk. Any fluctuation in share prices can either increase or decrease your investment value.
Invest in Cryptocurrency
People have been discussing cryptocurrency over the past few years as more people explore it as an investment option. Crypto trading is a highly risky avenue. However, you may think of margin trading with crypto for higher returns than any other investment opportunity.
Since it exhibits wide price changes within a short timeframe, you can never be sure if you will get a profit. If you do not approach this avenue with a clear strategy, you may end up making losses.
Unlike other forms of investment, crypto trading is easy to start. You do not need to sign any documents or visit any institution. You only need to create an account on a crypto platform, get a wallet, and track your assets. If you want to get started, here is everything you need to know about crypto trading.
Investing in Bonds
Investing in bonds involves lending money to a bond issuer in exchange for interest. Some of the bonds you can choose to include in your investment portfolio include corporate bonds, municipal bonds, savings bonds, and treasury bonds.
You can either buy bonds privately by dealing directly with the borrower, over the counter, or publicly. Companies issue bonds to raise money to refinance their debts, maintain their operations or finance new projects.
Before you can invest in bonds, you need to research and find out the best bonds that fit your unique situation and one that you can manage.
Summing Up
There is no time limitation to start investing. In a world full of uncertainty, you need to prepare yourself for the future better. While one can only hope for a better 2021, it is only right always to be ready for any bumpy rides you may experience. As such, you should maximize your efforts to reach your financial goals.
Apart from making your money work for you, you can also make money from your knowledge. For example, you can provide consultation services, create online courses, run workshops, write a book, or even create a networking group.
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